An Uncommon Court: How the High Court of Australia Has Undermined Australian Federalism

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1 An Uncommon Court: How the High Court of Australia Has Undermined Australian Federalism JAMES ALLAN * AND NICHOLAS ARONEY ** Abstract The authors contend that Australia s High Court, in deciding federal distribution of powers cases over the last century, has created an end product that looks like one of A P Herbert s UNCOMMON LAW mock hypothetical cases. These were sustained parodies of common law reasoning in which each step in the fictional judge s train of thought followed plausibly from what went before. And yet from such unexceptionable starting points the conclusions reached were ridiculous. The same general sort of analysis is here applied to the High Court s federalism jurisprudence, the fit being a surprisingly good one. 1. Introduction A P Herbert s Uncommon Law 1 is a brilliantly sustained parody of the common law. Its 66 so-called misleading cases, which over time first appeared in Punch, appear technically correct in both the language and reasoning typically used in common law judgments. Each step in the fictional judge s train of thought follows plausibly from what went before some steps are wholly non-contentious and mirror orthodoxy, some choose between alternatives that are all within the realm of reasonable possibilities, none is obviously identifiable as beyond the Pale. And yet from sound, unexceptional starting points, the conclusions reached are ridiculous; they are laughable which is, of course, Herbert s intention. He is trying to make the reader laugh by shepherding him along a path that ends in absurdity, but whose twists and turns all appear well-chosen, or at least not strikingly wayward. Our contention in this paper will be that Australia s High Court, in deciding federal distribution of powers cases over the last century, culminating in the recent Work Choices case, 2 has created an end product that looks not unlike one of Herbert s misleading cases, although of course the High Court s intentions have 1 * Garrick Professor of Law, TC Beirne School of Law, The University of Queensland. ** Reader in Law, TC Beirne School of Law, The University of Queensland. Our thanks to Jeff Goldsworthy, Grant Huscroft, Greg Taylor, George Williams, George Winterton and two anonymous referees for their comments on an earlier version of this article, as well as to Belinda McRae for her research assistance. 1 New ed, 1969 (First published 1935). 2 New South Wales v Commonwealth (2006) 229 CLR 1 ( Work Choices ).

2 246 SYDNEY LAW REVIEW [VOL 30: 245 been something other than simply the reader s amusement. Such a contention, we readily acknowledge, will come as no surprise to those familiar with the constitutional jurisprudence of the superior courts of other countries. The Australian High Court has been by no means unique in its ability, over time, to interpret the Constitution in a manner widely at variance with the intentions and expectations of its founders. However, the techniques by which the High Court of Australia has done this are perhaps unique, for they have rested upon a rather unlikely foundation: a certain kind of textual formalism, the professed motivating reason for which has been the idea that by following this method the judges will avoid imposing their own subjective and idiosyncratic views upon the authoritative text of the Constitution. 3 The ironic result to adopt Herbert s terminology has been a most uncommon body of constitutional law, generated by a most uncommon court, using what appear to be the most orthodox techniques of common law reasoning, applied to the text of the Constitution. Before we attempt to support this contention, let us recall some of the outcomes produced in Herbert s Uncommon Law cases. In Dahlia Ltd v Yvonne (pp ) a decision of the House of Lords is argued to be in the nature of an act of God, something no reasonable man could assess or predict in advance. In Fardell v Potts (pp 1 6) the notion of a reasonable man is held not to encompass or subsume that of a reasonable woman. In Rex v Puddle (pp ) a Collector of Taxes is held to be a blackmailer. In HM Customs and Excise v Bathbourne Literary Society (pp ) a lecturer who makes people laugh, and so is entertaining as well as informative, is held (against expectations) not to be subject to a heavy tax and not to be doing something illegal. In Haddock v Mogul Hotels, Ltd (pp ) it is held that every waiter must know by heart the whole text of the Licensing Acts before being permitted, lawfully, to remove a patron s alcoholic beverage after closing time. In Haddock v Thwale (pp ) motor cars are held to be subject to the same treatment, at law, as wild beasts (and in this case ordered to be put down). And so on, and so on. Each time the conclusion reached looks laughably far-fetched, or at minimum implausible, when viewed from the initial vantage of the rules (statutory or case law ones) used to determine the outcome. The self-evident problem with each case the point which enables Herbert to demonstrate the absurdity of the result is that the enactors of those rules (or the earlier judges creating them in a previous case) would never have envisaged that they would be used or interpreted in this way. It is precisely this claim that we will make in relation to the Australian Constitution and how it has been interpreted by the High Court in federalism cases since None of the Constitution s framers would ever have imagined, back in the 1890s or in 1901, that a century or so later the Australian States would be as emasculated as they are today: that they would be so dependent upon the Commonwealth for their governmental finances; 4 and that their policy-making 3 Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 ( Huddart, Parker ) at 388 (Isaacs J); Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129 ( Engineers ) at 142 (Knox CJ, Isaacs, Rich & Starke JJ).

3 2008] AN UNCOMMON COURT 247 capacities would be so contingent upon political decisions taken by the Federal Government. 5 More specifically, none of the framers would have anticipated that the corporations power (s 51(xx)) would be held to allow the Commonwealth to take over the field of industrial relations; 6 that the external affairs power (s 51(xxix)) would be deemed to enable the Commonwealth to enact far-reaching environmental, human rights and industrial relations laws; 7 or that the States could be cajoled into abjuring income tax powers, not least because four federal statutes passed at the same time (during the Second World War) and consecutively numbered were assessed or judged individually (and, of course, held to be valid) and not as part of a package. 8 And this is merely to highlight some of the better known ways in which the competencies of the Commonwealth have waxed while those of the States have waned. 9 Nothing in the language of the Australian Constitution, or its structure, or the process that was used to adopt it, or the basis upon which its approval by the voters was promoted, or the likely original understandings of most of those voters, or anything else at the time would have suggested that the States would become the enfeebled, emasculated creatures they have become. Put slightly differently, no one, or almost no one, 10 would have guessed or predicted that virtually all of the important division of powers cases would eventually go the Commonwealth s way 11 or at least there would have been no grounds at the time for thinking that Australia s political centre would do so much better 12 at the hands of the judiciary than would be the case in Canada, 13 Germany 14 or even the United States Constitutions and Constitutionalism Of course to make this sort of claim begs an initial and crucial issue, namely how a constitution and constitutionalism generally are best understood. Very broadly speaking there are two competing views. One is that written constitutions are about locking things in. 16 So perhaps a constitution might contain an enumeration of 4 Compare Russell L Mathews & William R C Jay, Federal Finance: Intergovernmental Financial Relations in Australia since Federation (1972); Cliff Walsh, Federalism Australian- Style: Towards Some New Perspectives in Geoffrey Brennan, Bhajan Grewal & Peter Groenewegen (eds), Taxation and Fiscal Federalism: Essays in Honour of Russell Mathews (1988) 222; Brian Galligan & Cliff Walsh, Australian Federalism: Developments and Prospects (1990) 20(4) Publius: The Journal of Federalism 1 at 7 13; Neil Warren, Benchmarking Australia s Intergovernmental Fiscal Arrangements: Final Report (New South Wales Government, 2006); Anne Twomey & Glenn Withers, Australia s Federal Future: Delivering Growth and Prosperity (Council for the Australian Federation, 2007) at 26 7, See Brian Galligan, A Federal Republic: Australia s Constitutional System of Government (1995); Brian Galligan, A Federal Republic: Australia s Constitutional System of Government (1995), ch 9; David Meale, The History of the Federal Idea in Australian Constitutional Jurisprudence: A Reappraisal (1992) 8 Australian Journal of Law and Society See Work Choices (2006) 229 CLR 1. 7 See Commonwealth v Tasmanian Dam ( Tasmanian Dam ) (1983) 158 CLR 1. See, also, Sir Harry Gibbs, Address Launching UTAC Vol. 1 (1993) 3 Upholding the Australian Constitution at 135, 137 where he characterises this case as having the effect of deleting the words external affairs and substituting anything. 8 See South Australia v Commonwealth (1942) 65 CLR 373 ( First Uniform Tax ).

4 248 SYDNEY LAW REVIEW [VOL 30: 245 Federal and possibly State powers, rules related to how members of the chambers of Parliament are selected, provisions related to who chooses the most senior judges and till what age they can sit, as well as a procedure for making constitutional amendments. 17 These things and others will be made harder than usual to alter or remove. To a certain degree they will be locked in, and in federal constitutions they will be locked in through formation and amendment procedures which are themselves characteristically federal in nature. 18 On this first view, locking these things in is the very point of adopting a written constitution. It is to take a path diametrically opposed to those who would opt to leave each generation to decide such matters for itself by a simple Act of Parliament (along the lines followed in New Zealand, for example). 19 As Larry Alexander (a proponent of this first view) puts it, in going down the route of a written constitution we have decided that risking rigidity rather than risking security 20 is the better bet. Constitutions and constitutionalism are on this view best understood as a series of rules that impose second-order constraints on the first-order preferences of the people and of their elected representatives and executive officials. 21 Justice Antonin Scalia of the United States Supreme Court puts it this way: It certainly cannot be said that a constitution naturally suggests changeability; to the contrary, its whole purpose is to prevent change to embed certain rights in such a manner that future generations cannot readily take them away. A society that adopts a bill of rights [for instance] is skeptical that evolving standards of decency always marks progress, and that societies always mature as opposed to rot. 22 On this way of understanding a constitution, a series of rules related to the legislature, executive and judiciary, a division of powers between the States and the Federation, an amending formula, and more are locked in made hard (but 9 There is an extensive literature on this question. For a sample, see R D Lumb, The Franklin Dam Decision and The External Affairs Power: A Comment (1984) 13 University of Queensland Law Journal 138; Gregory Craven, The States Decline, Fall or What? in Gregory Craven (ed), Australian Federalism: Towards the Second Century (1992) ; Harry Gibbs, The Decline of Federalism? (1994) 18 University of Queensland Law Journal 1; Geoffrey de Q Walker, The Seven Pillars of Centralism: Engineers Case and Federalism (2002) 76 Australian Law Journal 678; Leslie Zines, Changing Attitudes to Federalism and its Purpose in Robert French, Geoffrey Lindell & Cheryl Saunders (eds), Reflections on the Australian Constitution (2003) 86; George Winterton, The High Court and Federalism: A Centenary Evaluation in Peter Cain (ed), Centenary Essays for the High Court of Australia (2004) It is quite possible that Sir Isaac Isaacs foresaw the potential for interpreting the Constitution in a pro-federal manner from the beginning, so long as the High Court s interpretive approach could be separated from the framer s original intentions and understandings. 11 This is not to deny that some well-known federalism cases went against the Commonwealth, such as the Communist Party Case (The Communist Party v The Commonwealth (1951) 83 CLR 1), the Bank Nationalisation Case (Bank of New South Wales v The Commonwealth (1948) 76 CLR 1), the State Banking Case (Melbourne Corporation v The Commonwealth (1947) 74 CLR 31) and the Incorporation Case (New South Wales v The Commonwealth (1990) 169 CLR 482), nor that s 51 was in part a ground for these decisions. The point is that the general trend has undeniably been in the Commonwealth s favour.

5 2008] AN UNCOMMON COURT 249 by no means impossible) to change. Outside these locked-in provisions, there is parliamentary sovereignty. The second view of constitutions and constitutionalism is very different. On this second view, a constitution is not about locking anything in at all; rather it is at most understood to be a statement of our most important values and the vehicle through which these values are created and crystallised. 23 Significantly more than under the first view, this second understanding sees a constitution as an empty vessel (or at least as a not particularly constraining one) that does little more than set out a relatively amorphous, indeterminate list of guidelines and values, a list that will need updating, changing and altering as society advances and grows. 24 Proponents of this second view rarely worry too much about who effects these upgrades, though a moment s thought will tell you that it will almost always be the unelected judges. When a constitution is conceived of as being a living tree, 25 constantly evolving 26 and needing to keep pace with civilisation 27 the variety of available metaphors is itself revealing then some group of real life human beings will have to do the changing or altering or branching out, and will do so according to that group s best lights (whether the end product happens to fall in line with the demands of something called civilisation or not). Save for the few, rare times when the amending machinery is successfully used, 28 the group of real life human beings that will be in a position to make all these changes will be the unelected judges. No one else will be able to do so. Accordingly, even on this second view of constitutions and constitutionalism, for all the rest of us the percent of the population who are not superior court judges the constitution will be locked in. Whatever updating, unshackling or fixing is claimed by some to be needed, regular citizens 29 will not be doing it. The first view of constitutions and constitutionalism, then, leaves the unelected judges just about as shackled as the rest of us. Major change (including re-writing the federal balance of power) has to come via the amending provision, 30 the only leeway for judicial input being interstitial. The second view, in stark contrast to the 12 For comparative studies which have recognised the particularly centralist orientation of Australian federalism as it has become, see Daniel J Elazar, Federal Systems of the World: A handbook of federal, confederal and autonomy arrangements (2nd ed, 1994) at 19 25; Ronald L. Watts, Comparing Federal Systems (2nd ed, 1999) at 25, 39, 46; John M. Williams & Clement Macintyre, Commonwealth of Australia in Akhtar Majeed, Ronald Lampman Watts & Douglas M Brown (eds), Distribution of Powers and Responsibilities in Federal Countries (2006) 8, 23 4; Thomas O Hueglin & Alan Fenna, Comparative federalism: A systematic inquiry (2006) at 165 6, ; Greg Taylor, Characterisation in Federations: Six Countries Compared (2006) at See Alan C Cairns, The Judicial Committee and Its Critics (1971) 4(3) Canadian Journal of Political Science 301; Christopher Gilbert, Australian and Canadian federalism : A study of judicial techniques (1986); Bruce W Hodgins, Federalism in Canada and Australia: Historical perspectives: (1989); Nicholas Aroney, Formation, Representation and Amendment in Federal Constitutions (2006) 54(1) American Journal of Comparative Law 277, See Donald Kommers, The Constitutional Jurisprudence of the Federal Republic of Germany (2 nd ed, 1997). 15 See cases and articles cited below nn72 73, For a defence of this view in relation to the Australian Constitution, see Nicholas Aroney, Freedom of Speech in the Constitution (1998), ch 2.

6 250 SYDNEY LAW REVIEW [VOL 30: 245 first, most assuredly does not leave our top judges more or less as shackled as the rest of us. We recognise, of course, that in suggesting that there are at base only two competing views about the role, place and function of a constitution the lockthings-in view and the express-our-most-important-values view there will be some who balk at both. For instance, some critics might want to disavow the first view because of the privileged position it gives to the founding generation and the second because of the largely unconstrained power it effectively hands over to unelected judges. 31 Such critics might be inclined to think that a New Zealandstyle parliamentary sovereignty system is the route to go for those who dislike the idea of locking-in future generations, or at least that the New Zealand route (which gives the nothing is locked-in updating job to an elected Parliament) is preferable to a view (the second one) that has the effect of putting virtually all the updating power in the hands of a largely unshackled judiciary. Now, abstractly put, this qualification might or might not be agreed upon. 32 The fact is, however, that in the vast preponderance of modern liberal democracies there is a written constitution which defines and limits the powers of the government, legislature and judiciary and, further, it is difficult to imagine how a specifically federal system of government could be established and operate without a binding, written constitution. 33 Thus, the fact is that in Australia, as in most other federal states, we do have a written constitution. What is contentious is how this constitution is to be interpreted by the courts. 17 Some jurisdictions might even lay down, in vague, amorphous but emotively stirring terms, a set of individual rights, though one of us is a strong critic of bills of rights and believes the decision to forswear one here in Australia was a wise one. See, for instance, James Allan in: Bills of Rights and Judicial Power A Liberal s Quandary? (1996) 16 Oxford Journal of Legal Studies 337; Sympathy and Antipathy: Essays Legal and Philosophical (2002); Rights, Paternalism, Constitutions and Judges in Grant Huscroft & Paul Rishworth (eds), Litigating Rights: Perspectives from Domestic and International Law (2002); Oh That I Were Made Judge in the Land (2002) 30 Federal Law Review 561; Paying for the Comfort of Dogma (2003) 25 Sydney Law Review 63; A Modest Proposal (2003) 23 Oxford Journal of Legal Studies 197; An Unashamed Majoritarian (2004) 27 Dalhousie Law Journal 537; Portia, Bassanio or Dick the Butcher? Constraining Judges in the Twenty-First Century (2006) 17 King s College Law Journal 1; Thin Beats Fat Yet Again Conceptions of Democracy (2006) 25 Law & Philosophy We simplify things here to a certain extent. For more detail see Aroney, above n13; John Kincaid & G Alan Tarr, Constitutional Origins, Structure, and Change in Federal Countries (2005). 19 See Philip A Joseph, Constitutional and Administrative Law in New Zealand (2nd ed, 2001). 20 Larry Alexander (ed), Constitutionalism: Philosophical Foundations (1998) at 4. See too Richard Kay, American Constitutionalism in Larry Alexander (ed), Constitutionalism: Philosophical Foundations (1998) at Frederick Schauer, Judicial Supremacy and the Modest Constitution (2004) 92 California Law Review at 1045, Antonin Scalia, A Matter of Interpretation (1997) at Schauer, above n21 at A rather Whiggish set of presuppositions about the inevitability of societal progress seems to be assumed by this view. 25 Edwards v Canada (Attorney-General) [1930] AC 124 at 136 ( Edwards ) (Lord Sankey). 26 Al-Kateb v Godwin (2004) 219 CLR 562 at 643 (Kirby J). 27 Ministry of Transport v Noort [1992] NZLR 260 at 271 (Cooke P).

7 2008] AN UNCOMMON COURT Interpretive Literalism It is at this point that we have to confront the proposition, peculiar to the High Court of Australia, that the best way to interpret a written constitution in particular, the best way to avoid idiosyncratic, subjective judicial interpretation is to adopt a policy of interpretive literalism. 34 As we indicated at the outset, constitutional literalism entered Australian constitutional jurisprudence on the basis that it would eliminate, or at least minimise, the power of unelected judges to impose their views about the meaning of the Constitution on the rest of us. 35 On this view, yes, we have locked something in, but what we have locked-in is simply a collection of words. Nothing more. And those words need to be read according to their isolated, literal, natural meaning, without invoking anything about the expectations, understandings or intended meanings of those who drafted, approved or enacted the document. Such a position is a recurrent one, fundamental to the Australian High Court s distribution of powers jurisprudence. 36 Yet at the outset it is possible to identify a number of difficulties with this sort of appeal to literalism. When construing statutes judges, including Australian judges, frequently make use of what might be called a purposive approach to interpretation. 37 According to this approach, a contested statutory provision is interpreted in the light of propositions about the statute s purpose. Yet to talk of a statute s purpose is at base a kind of shorthand for talking about the purpose or intentions of those who enacted the statute. After all, only living beings have purposes. No set of words on paper literally has a purpose separate from the understandings and aspirations of its author or authors. 38 So a purposive approach in statutory interpretation is, in effect, an appeal to enactors intentions. What was their purpose in enacting this contested provision? 28 We here have in mind the amendment history of common law countries such as Australia, Canada and the United States. Other constitutions, such as the Swiss a constitution that does not have judicial review of federal legislation, but protects the interests of its constituent cantons through much more directly democratic mechanisms, including the referendum have been amended much more regularly. See Nicolas Schmitt, Federalism: The Swiss Experience (1996) at 46 8, 61 3, Of course it may be pointed out in response that ordinary citizens do not have all that much real influence over elected politicians. But on any analysis, they have more influence over elected politicians than over unelected judges. This is our point. Those readers so inclined can read this point with whatever degree of qualification they tend to bring to their understanding of representative democracy. 30 Unlike the special majorities of State legislatures or conventions required under the United States Constitution and the special majorities and unanimity required under the Canadian Constitution, the Australian Constitution requires simple majorities of the voters of the States and the voters of the entire Commonwealth. Most of the many failed amendment proposals in Australia have not been due to the dual majority requirement but simply because a simple majority of Australian voters whatever their reasons did not wish to ratify the proposed amendment. And, notably, many of the failed proposals involved either an increase in Commonwealth legislative power or the insertion of Bill of Rights-type provisions. 31 Not for them the nebulous constitutions are about articulating and crystallising rather amorphous values and then leaving it to the judges to tell us what the ramifications of this living tree we have planted might be! See Edwards [1930] AC 124 at 136 (Lord Sankey). 32 It is certainly the view of one us. See Allan, A Defence of the Status Quo ; Portia, Bassanio or Dick the Butcher, above n17.

8 252 SYDNEY LAW REVIEW [VOL 30: 245 As it happens, even literalism as an approach to statutory interpretation can be understood as a sort of appeal to enactors intentions: we give the words used their literal meaning (appealing only to wider considerations when there is, say, ambiguity) because this, itself, is what the enactors intended (and because there might also be good pragmatic future consequences in forcing legislators to say more precisely and clearly what they mean, a justification which not only appeals indirectly and in a long-term sense to upholding enactors intentions but one that is unavailable in the constitutional context where there is no way for the elected branches to gainsay the judges or to come back with a clearer, more precise form of words). Indeed, when literalism was first introduced into Australian constitutional law, it was couched in terms very similar to this, indeed as the application of ordinary principles of statutory interpretation to the construction of the Australian Constitution. 39 Since then, however, statutory interpretation has taken a much more purposive turn, whereas constitutional interpretation in Australia has remained stubbornly literalist. Thus the first difficulty with literalism is that appeals to the bare, literal meaning of the text are relatively rare in the context of statutory interpretation, and even when they are made in that context they rest most plausibly on an implicit background appeal to enactors intentions. 40 One might wonder, then, why some disembodied version of literalism would be attractive in constitutional interpretation but unattractive as regards statutes. 41 The second difficulty with the literalism gambit is even more damning. It is this. A constitution is not a regular statute. A constitution is superior law, and a constitution is a framework of government, intended to endure. Now leave aside for the moment the higher status of a constitution the fact that an elected legislature can overturn or trump judicial interpretations of a statute with which it disagrees but that it cannot do so in the case of constitutional interpretations and 33 R v Kirby; Ex parte Boilermakers Society of Australia (1956) 94 CLR 254 at See also AV Dicey, Introduction to the Study of the Law of the Constitution (8 th ed, 1920) at , , discussed in Nicholas Aroney, A Commonwealth of Commonwealths: Late Nineteenth-Century Conceptions of Federalism and Their Impact on Australian Federation, (2002) 23(3) Journal of Legal History 253 at The strategic importance of interpretive literalism in Australian federalism cases has been noted in LJM Cooray & Suri Ratnapala, The High Court and the Constitution - Literalism and Beyond in Greg Craven (ed), The Convention Debates ; Commentaries, Indices and Guide (1987) vol 6, 203; Gregory Craven, The Crisis of Constitutional Literalism in Australia in H P Lee & George Winterton (eds), Australian Constitutional Perspectives (1992); Gregory Craven, More Cracks in the Façade of Literalism: Is there an Engineer in the House? (1992) 18 Melbourne University Law Review 540. On the related theme of interpretative legalism in Australia, see Jeffrey Goldsworthy, Australia: Devotion to Legalism in Jeffrey Goldsworthy (ed), Interpreting Constitutions: A Comparative Study (2006) Engineers (1920) 28 CLR 129 at 142 (Knox CJ, Isaacs, Rich & Starke JJ). 36 See Nicholas Aroney, Constitutional Choices in the Work Choices Case, or What Exactly is Wrong with the Reserved Powers Doctrine? (2008) 32 Melbourne University Law Review (forthcoming). 37 Purposive interpretation is now mandated by the Acts Interpretation Act 1901 (Cth) s 15AA and similar State legislation. See DC Pearce and RS Geddes, Statutory Interpretation in Australia (6 ed, 2006) at 25.

9 2008] AN UNCOMMON COURT 253 relatedly that the tasks of statutory and constitutional interpretation are asymmetrical in terms of the relative powers of the elected and unelected branches. Leave that aside for the moment, and focus upon the fact that a constitution is a framework of government, intended to endure. This last kind of difference between a regular statute and a constitution has implications for the level of specificity and detail contained in each kind of document. Constitutions are charters of government, specifying the ways in which law is to be made, enforced and adjudicated, rather than specifying the particular laws under which those subject to the law are to be governed. For this reason, constitutions are overwhelmingly more general, less specific, more abstract than ordinary statutes. They are made to last a long time, in the knowledge that amendments and changes to the entire framework of government will be and, save in extremis, probably ought to be relatively infrequent. In such circumstances, any professed attachment to a literal mode of interpretation will leave the point-of-application interpreters the judges of our superior courts largely unconstrained in reaching the outcomes they otherwise desire. Why? Well, consider what is involved when interpreting a general phrase in a constitution rather than a specific phrase contained within a detailed tax or corporations statute. To make what is at stake more evident still, imagine a constitution containing a US- or Canadian-style bill of rights. These kinds of instruments all make mention, inter alia, of a right to freedom of speech or to freedom of expression. Adopt a literal approach to interpretation, one divorced from original understandings and intentions, and how constraining on the point-ofapplication interpreters will this injunction to guarantee freedom of speech and expression be? 42 How does literalism as regards these three words play out when it comes to, say, campaign finance rules, hate speech provisions or defamation regimes? Does a literal or textual approach to interpreting these and other rights in 38 See Richard Kay, Original Intentions, Standard Meanings and the Legal Character of the Constitution (1989) 6 Constitutional Commentary 39; Richard Kay, Adherence to the Original Intentions in Constitutional Adjudication: Three Objectives and Responses (1988) 82 Northwestern University Law Review 226; Jeffrey Goldsworthy, Implications in Language, Law and the Constitution in Geoffrey Lindell (ed), Future Directions in Australian Constitutional Law: Essays in Honour of Professor Leslie Zines (1994) 150; Jeffrey Goldsworthy, Originalism in Constitutional Interpretation (1997) 25 Federal Law Review 1; Jeffrey Goldsworthy, Interpreting the Constitution in its Second Century (2000) 24 Melbourne University Law Review Engineers (1920) 28 CLR 129 at (Knox CJ, Isaacs, Rich & Starke JJ), 161 2, 165 (Higgins J). 40 See James Allan, Constitutional Interpretation v. Statutory Interpretation: Understanding the Attractions of Original Intent (2006) 6 Legal Theory 109. Furthermore, when a statute is given a meaning is interpreted by the unelected judges, that meaning can be overturned by the elected legislature. The statute can be amended by the normal 50 percent plus one procedure. 41 Scalia (above n22) and Allan (above n40) both argue that approaches to interpreting statutes and constitutions can differ, and should differ. For instance, one can be against purposive interpretation when it comes to statutes (because it gives judges too much interpretive power) while being in favour of some form of originalism as regards constitutional provisions (because this is the best option for minimising judicial adventurism, in this different context).

10 254 SYDNEY LAW REVIEW [VOL 30: 245 a bill of rights leave the citizen at the mercy of the interpreter s judgment or discretion? 43 Clearly the answer is yes. Just compare RAV v City of St Paul 44 with R v Keegstra 45 (concerning laws criminalising hate speech in the US and Canada) or New York Times Co v Sullivan 46 with Hill v Church of Scientology of Toronto 47 and even with Lange v Atkinson 48 and Reynolds v Times Newspapers 49 (concerning defamation laws in the US, Canada, New Zealand and the UK the latter two countries having statutory bills of rights with the same phrases). Or look at how the right to freedom of speech has been interpreted in relation to campaign spending in Buckley v Valeo and Harper v Canada (Attorney General). 50 Or take just about any of the other rights enumerated in these bill of rights instruments. Does a textual literalist approach tell us where to draw the line when it comes to voting, 51 or who can marry, 52 or limits on advertising? 53 Does literalism have any decisive effect in ruling on what does or does not constitute cruel and unusual punishments, due process of law, unreasonable search and seizure or any of the usual mandates found in a bill of rights? Our immediate point here is not that the judges in these cases actually appealed to literalism in their reasoning. It is that such appeals, in these contexts, would be empty, that they would provide next to no guidance in the interpretation of the abstract language used, and without more would amount to leaving the decisions almost completely to the open-ended discretion of the point-of-application judges. In other words, a resort to literalism in this context collapses into the second view of constitutions and constitutionalism sketched above, one where percent of the population is locked-in but where judges sitting at the zenith of the court hierarchy are left free to upgrade or change or alter it as they think best or right. Insisting on the authoritativeness of the text and nothing but the text 54 when it comes to constitutionalised rights guarantees is akin to handing the judges a blank cheque. Appeals to literalism might possibly make sense as regards interpreting the preponderance of statutes, 55 but not as regards vague, rather indeterminate 42 In Canada s case, the freedom of expression right can be limited by laws which the judges deem to be reasonable and justifiable (see Canadian Charter of Rights and Freedoms, s 1). Of course in the US this is implicit. Canada s two-step process (identify the right then ask if limits on it are reasonable) is simply rolled up into a single step in the US. But rights are no more treated as absolutes there than in Canada. See Allan, above n Jeremy Waldron, Law and Disagreement (1999) at US 377 (1992). 45 [1990] 3 SCR US 254 (1964). 47 [1995] 2 SCR [2000] 3 NZLR [2001] 2 AC Buckley v Valeo 424 US 1 (1976); Harper v Canada (Attorney General) [2004] 1 SCR See Sauve v Canada (Chief Electoral Officer) [2002] 3 SCR 519, a 5 4 decision of the Supreme Court of Canada. 52 See Halpern v Canada (Attorney General) (2003) 65 OR (3d) 161 and Quilter v Attorney- General [1998] 1 NZLR Consider RJR-MacDonald v Canada [1995] 3 SCR 199 and Canada (Attorney General) v JTI- Macdonald Corp [2007] SCC Waldron, above n43 at 145.

11 2008] AN UNCOMMON COURT 255 rights guarantees in a constitution. For the latter, an insistence on literalism and textualism is effectively the rejection of the lock-things-in view of constitutions. Whatever proponents of literalism might otherwise say, in this context, at least, the few words on their own are in no way constraining. Either one appeals to original intentions and understandings or one shrugs and hands the decision over to the point-of-application judiciary. As Australia has no constitutionalised bill of rights meaning that our reference to these instruments and to phrases such as freedom of expression was illustrative 56 the question for us in thinking about division of powers cases is whether advocating literalism and textualism is somehow more constraining when applied to the various heads of legislative power conferred upon the Commonwealth by the Australian Constitution compared to its use in the case of rights guarantees. Is the appeal to literalism in this context, whether intended or otherwise, little more than a dressed-up form of advocating the second view of constitutionalism the one where superior judges are free to upgrade and alter the law of the constitution in order to keep pace with what they happen to feel civilisation or progress or efficiency demands, all the while unencumbered by constraints other than those they impose on themselves? Is the invocation of literalism in constitutional interpretation just an invitation to opt for a kind of judicial activism? That depends on the degree of specificity and detail one finds in the following language, used in s 51 of the Australian Constitution to confer certain heads of legislative power upon the Commonwealth Parliament: The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: (i) Trade and commerce with other countries, and among the States (xx) Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth (xxix) External Affairs (xxxv) Conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State. 55 See Allan, above n40, for an argument that it does make sense in that context (though, also, that it involves an implicit sort of reliance on originalism even there). 56 Although note the implied freedom of political communication which the High Court discovered to be necessarily implied by the Australian Constitution in Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106 and Nationwide News Pty Ltd v Wills (1992) 177 CLR 1, and later revised in Lange v Australian Broadcasting Corporation (1997) 189 CLR 520. The implied freedom gives the High Court similar interpretive freedom. For a critical discussion, see Aroney, above n16 and, more recently, Nicholas Aroney, Justice McHugh, Representative Government and the Elimination of Balancing (2006) 28 Sydney Law Review 505.

12 256 SYDNEY LAW REVIEW [VOL 30: 245 Does the literal or ordinary or natural meaning 57 of these paragraphs put any more constraints on the point-of-application judges than does invoking the phrase freedom of expression in disputes over where to draw highly contested lines in cases concerning campaign finance or hate speech or defamation regimes? Or is it the case as we think that appeals to literalism or plain meaning, by themselves and without more, leave it virtually wide open whether a Commonwealth statute which has at least some connection to these topics will be upheld as constitutional? 58 We stand by our earlier claim that broadly speaking there are two competing views about the role, place and function of a constitution, and add that relatively unvarnished appeals to literalism in the division of powers context amount to endorsements of the second view ( express our most important values and leave the details to the judges ), not the first view (where judges, too, are locked-in). And this brings us back to our starting contention. Australia s High Court, in deciding distribution of powers cases over the last century, and culminating most recently in the Work Choices case, has created an A P Herbert-like end product, one both seductively plausible in the terms presented, 59 and yet one implausibly far-fetched when considered in the light of a reading of the Constitution as a whole, and more so still when prevailing understandings and expectations at the time of adoption are considered relevant. We rest that contention of implausibility, and what follows in this paper, explicitly on the first view of constitutions and constitutionalism the one that sees them as at heart about locking things in. So we do not beg the initial and crucial issue of how a constitution is best understood. Rather, we reject the second view. It is implausible; it cannot explain why people argue for so long and so passionately over the text as a whole; it has great difficulty in explaining why regular citizens would find it even remotely attractive; it imposes an essentially undemocratic, judicially-driven process; and, when urged by judges, it is a self-serving understanding of the constitution, as its practical effect is to leave those same judges free to update, upgrade and even upset what the Constitution means while the rest of us are locked-in. 57 Engineers (1920) 28 CLR 129 at 142, (Knox CJ, Isaacs, Rich & Starke JJ). 58 Indeed, it could be said that, while judges interpreting Bills of Rights have almost universally thought that no right can be absolute but must be balanced against competing public goals, the High Court of Australia has chosen to exercise its discretion by reading federal heads of legislative power in absolute terms, without any significant concern to maintain a balance between the Commonwealth and the States. Thus, on textual literalist grounds, the High Court in the Work Choices case emphatically rejected any appeal to federal balance. See Work Choices (2006) 229 CLR 1 at 56, 57, 59. See also Attorney-General (WA) v Australian National Airlines Commission (1976) 138 CLR 492 at 530 (Murphy J); Commonwealth v Tasmanian Dam (1983) 158 CLR 1 at 129 (Mason J). 59 Compare Nicholas Aroney, A Seductive Plausibility: Freedom of Speech in the Constitution (1995) 18 University of Queensland Law Journal 249, citing United States v Ft. Reels of Film 413 US 123 (1973) at 127 (Burger CJ) ( The seductive plausibility of single steps in a chain of evolutionary development of a legal rule is often not perceived until a third, fourth, or fifth "logical" extension occurs. Each step, when taken, appeared a reasonable step in relation to that which preceded it, although the aggregate or end result is one that would never have been seriously considered in the first instance. )

13 2008] AN UNCOMMON COURT 257 The remainder of this paper seeks to demonstrate and to explain precisely how Australia s distribution of powers jurisprudence has an Uncommon Law quality to it. 4. Where Are We Now? Debate over the current state of Australian federalism is polarised. The basic reason is political. The political polarisation derives from the general tendency of Australian voters in recent decades to vote differently in Federal and State elections, with the result that, at any particular time, the major party which does not control the Federal government usually comes to control most if not all of the State governments. Thus, during the Hawke and Keating Federal Labor governments from 1983 to 1996, the States soon came to be ruled by Liberal- National Coalition governments, whereas after the election of the Howard Coalition Federal government in 1996, the States progressively became Labor dominated to the point where all the States currently have Labor governments. In this context, relationships between the Commonwealth and the States have been shaped by party politics, and prevailing attitudes to federalism on both sides of politics have shifted rather remarkably depending on which side has been in control of which level of government. During the Hawke and Keating Labor governments, conservative politicians often accused the Federal government of an over-reaching centralism which threatened the proper balance between the Commonwealth and the States. On the other hand, during the recent Howard Coalition government, Labor party politicians, particularly at a State level, frequently accused the Federal government of centralism and presented themselves as guardians of the federal balance. Many of the most important constitutional cases of recent decades illustrate this tendency. The best example of a confrontation between a Federal Labor government and State Liberal governments is the Tasmanian Dam case of The case involved an attempt by the Hawke Labor government to prevent a State Liberal government from constructing a dam on the Gordon River in southwestern Tasmania for the purpose of hydro-electric power generation. The Federal legislation was challenged not only by the State government of Tasmania, but also by the governments of Victoria, New South Wales and Queensland, on the ground that the Constitution did not authorise Federal intervention. When the High Court narrowly upheld the legislation on the basis of the Commonwealth s external affairs and corporations powers, the decision was widely regarded by conservative commentators as a major setback for Australian federalism and a failure by the High Court to maintain a proper balance between the Commonwealth and the States. 61 On the other hand, the best example of the reverse pattern, a confrontation between a Coalition Federal government and State Labor governments is the recent Work Choices case of In this case, the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) replaced the existing centralised 60 Commonwealth v Tasmanian Dam (1983) 158 CLR Lumb, Franklin Dam Decision, above n9. 62 Work Choices (2006) 229 CLR 1.

14 258 SYDNEY LAW REVIEW [VOL 30: 245 system of compulsory industrial arbitration with a national scheme founded upon individualised workplace agreements, a system more in accord with the economically liberal outlook of the Coalition Federal government. The legislation was challenged by five State Labor governments, technically because it was beyond the legislative powers of the Commonwealth, but substantively because the State Labor governments objected to the extent to which the law implemented a policy of individualised workplace agreements. When the High Court upheld the legislation in late 2006 the decision was, once again, criticised as spelling the end of federalism. 63 How much of these criticisms is an accurate description of the state of Australian federalism, and how much is hyperbole? It would certainly be an exaggeration to say that, as a consequence of these and other decisions, there is now no limit on the legislative powers of the Commonwealth, so that the continuing functions of the States now owe their existence entirely to the good graces of the Commonwealth. It is an exaggeration because the legislative powers of the Commonwealth remain tied to specific heads of power. Hence, although the High Court has clearly cemented the view that Federal powers are to be interpreted just about as widely as their language could possibly bear, it is still necessary for the Commonwealth to show that there is at least some connection, indeed a sufficient connection, between the legislation and a particular head or heads of power. It is also an exaggeration because there remain very significant institutional and political obstacles in the way of an attempt by the Commonwealth actually to exercise its legal powers to the full. Statutes still have to be passed by both Houses of the Commonwealth Parliament and, although the Howard Coalition government enjoyed a numerical majority in the Senate, this is not usually the case. 64 Moreover, Federal governments have to face the electors at least every three years and they face a potential electoral backlash should they push the envelope too far, especially if they should do so in a non-incremental manner. Finally, although the legislative powers of the States may have waned, the existence of the States as independent constituent elements of the Federation remains constitutionally secure, and thus a Federal government will continue to face pressure and opposition from State governments wielding not insignificant institutional powers, not to mention a certain level of political legitimacy. Federal governments may threaten, as they often do, to take over traditional State activities, but there are significant political and institutional obstacles which lie in the way of a complete Federal takeover. 63 Gregory Craven, How the High Court failed us, Australian Financial Review (24 November 2006) at 81; ABC Radio National, Work Choices Shipwreck, Perspective, 6 December The voting system for the upper house Senate is single transferable vote (STV) unlike the preferential or alternate transferable voting system used for lower house elections. The move in 1984 of allowing 12 rather than only 10 Senators per State has made it more difficult for any one party to control the Senate. The basic reason is this. Half of all Senators must contest each election (their terms being 6 years and general elections being mandated every 3 years). Under STV it is harder to win 4 of 6 State spots than it is to win 3 of 5.

15 2008] AN UNCOMMON COURT 259 But if declamations of a complete collapse of Australian federalism are an exaggeration, is there nothing to the common perception that the Commonwealth is waxing larger than ever, while the States are progressively being subordinated to the role of mere administrative units in a consolidated and centralised system of government? A dispassionate analysis of the respective legal capacities of the States and the Commonwealth as distinct from the uses to which these powers have actually been put certainly bears out the common perception. The constitutional causes are twofold. Firstly, the High Court has consistently upheld the capacity of the Commonwealth to dominate the States financially through its control over the most important forms of taxation revenue, 65 through its freedom to appropriate this revenue to any purposes that it thinks appropriate, 66 and through its ability to make grants to the States on any terms and conditions that it thinks fit. 67 Secondly, the High Court has adopted and consistently applied a method of the interpretation of Federal legislative powers which enables the Commonwealth to enter almost any imaginable field of public regulation, albeit in a way which is somehow tied to a specific head of power and thus sometimes through highly convoluted means. It is difficult to identify any area of State regulation which could not, in practice, be substantially shaped, if not wholly dominated, by Federal policy. Thus, the external affairs power can be used to regulate any field of activity whatsoever, so long as a relevant international treaty can be identified and so long as it can be shown that the Commonwealth is indeed implementing the terms of that treaty. 68 Likewise, it is now clear that the corporations power can be used to regulate both the internal and external activities of any trading, financial or foreign corporation in Australia, as well as the actions of persons having dealings with such corporations. 69 The fact that so much private activity is pursued through corporations of these kinds means that Federal power extends in this respect very far indeed not only into trade practices and industrial relations (as the cases have illustrated), but also in principle into traditional areas of State regulation, such as education, hospitals and local government. 70 Of course, the Commonwealth has not, and probably will not, enter all these fields to the full extent possible, essentially on account of the political and institutional barriers mentioned earlier. However, the existence of these capacities means that it always has the potential to do so, a fact not lost on State politicians and not irrelevant to their negotiations with their Commonwealth counterparts. Thus, where the States adopt policies in specific areas of particular concern to the 65 First Uniform Tax (1942) 65 CLR 373; Victoria v Commonwealth (1957) 99 CLR Attorney-General (Vic) (ex rel Dale) v Commonwealth (1945) 71 CLR 237; Victoria v Commonwealth (1975) 134 CLR Deputy Commissioner of Taxation v W R Moran Pty Ltd (1939) 61 CLR Tasmanian Dam (1983) 158 CLR 1. Again, there are different judicially-expressed views on how closely the Commonwealth must implement the terms of the relevant treaty. See Richardson v Forestry Commission (1988) 164 CLR 261; Queensland v Commonwealth (1989) 167 CLR 232; Victoria v Commonwealth (1996) 187 CLR Work Choices (2006) 229 CLR ABC Radio National, The Workchoices case, Law Report, 21 November 2006.

16 260 SYDNEY LAW REVIEW [VOL 30: 245 Commonwealth government, the Commonwealth is always liable to enter, and even to take over the field, 71 provided the political costs are not too great. And, short of direct intervention, the mere fact that the Commonwealth has this legal capacity backed by financial control places it in a superior bargaining position in inter-governmental discussions. The States face serious incentives to accede to Commonwealth demands if they wish to retain at least some role in the formation and implementation of government policy. The general result is that while the Commonwealth faces what at times amounts to significant political and institutional obstacles to exerting its powers to their fullest extent, it has the legal power to do so and is likely to do so when the political conditions are suitable; and even where they are not, its powers place pressure on the States to tailor their policies in accord with federal expectations. For these reasons, when compared to other federations, the circumstances in which the Australian States find themselves are particularly problematic and their powers comparatively enervated. Even allowing for some recent backtracking, 72 we recognise that the United States Supreme Court has gone further than the Australian High Court in its procentre interpretations of the interstate trade and commerce power. 73 However, this is more than counterbalanced by the much smaller list of federal legislative powers contained in the United States Constitution, 74 the relatively much more significant political barriers to federal government activity and intervention in the United States, 75 a political culture which places much greater emphasis upon local and state oriented policy development, 76 and the significantly stronger financial position of the American States. 77 Other comparisons cast the position of the States in Australia in just as poor, if not worse, a light. Take Switzerland. Even though there is no judicial review of federal legislation in that country, the Swiss Cantons are amply protected through 71 Particularly through its capacity to pre-empt State laws under the covering the field doctrine, first enunciated by Isaacs J in Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466 and affirmed by the Court in Ex parte McLean (1930) 43 CLR See, in particular, United States v Lopez 514 US 549 (1995); Printz v United States 521 US 898 (1997). 73 See, eg, Wickard v Filburn 317 US 111 (1942); United States v Darby 312 US 100 (1941). For a general discussion see Edward S Corwin, The Passing of Dual Federalism (1950) 36 Virginia Law Review 1; William Van Alstyne, The Second Death of Federalism (1985) 83 Michigan Law Review Compare US Constitution Art. I, s 8 with Australian Constitution s See Herbert Wechsler, The Political Safeguards of Federalism: The Role of the States in the Composition and Selection of the National Government (1954) 54 Columbia Law Review 543; Larry D Kramer, Putting the Politics Back into the Political Safeguards of Federalism (2000) 100 Columbia Law Review 215. Although compare Steven G Calabresi, A Government of Limited and Enumerated Powers : In Defense of United States v. Lopez (1995) 94 Michigan Law Review 752; John Yoo, The Judicial Safeguards of Federalism (1997) 70 Southern California Law Review 1311; Ernest A Young, The Rehnquist Court s Two Federalisms (2004) 83 Texas Law Review See Thomas O Hueglin & Alan Fenna, Comparative federalism: A systematic inquiry (2006) at 233 4, Warren, above n 4, 78 9.

17 2008] AN UNCOMMON COURT 261 a whole range of political mechanisms and practices, undergirded by a significant degree of financial independence and supported by a political culture which is highly decentralist. 78 Similarly, although the competences granted to the central government under the German Constitution are very extensive, 79 the Lander governments enjoy a constitutionally-guaranteed voice in the development of national policy and retain control over its implementation. 80 On the other hand, while the Canadian Provinces do not enjoy the same level of formal political safeguards which exist under the United States, Swiss and German Constitutions, 81 they enjoy the benefit of a political culture which has been forced to recognise the claims of the Province of Québec (as well as the claims of the growing western Provinces). This is further buttressed by the fact that the legislative powers of the Provinces are explicitly set out in the Constitution, 82 a feature which although originally intended to reflect the derivative nature of provincial powers has turned out otherwise, with the Supreme Court of Canada having to take account of the constitutionally-guaranteed legislative powers of the Provinces when determining the scope of Federal legislative power. Thus, the cumulative effect of early Privy Council decisions on the legislative powers of the Dominion and the Provinces on the whole strongly favoured the Provinces, 83 and subsequent Supreme Court decisions, while modifying these outcomes sometimes significantly, have not wholeheartedly reversed them. The explicit enumeration of provincial powers, together with the already mentioned political imperatives, means that in Canada there is a tangible limit on the scope of Federal legislative powers as interpreted by the courts. 84 Now, when the Australian Constitution was first drafted, the framers deliberately took as their models certain features of the United States, Swiss and Canadian systems, all with a view to constructing a fairly balanced system in which the Commonwealth would be given powers adequate to the responsibilities of a genuinely national government, while the States would retain a very significant role in the formulation of government policy on a more regional and localised level. In so doing, the framers were no fools, although perhaps with the benefit of hindsight they took certain missteps which have made possible what we see today. What were these missteps, and how have they been used by the High Court of Australia to upend the framers expectations? Like the mock 78 See Wolf Linder, Swiss Democracy: Possible Solutions to Conflict in Multicultural Societies (1994); Schmitt, above n See Basic Law for the Federal Republic of Germany, Arts 73, See Arthur B Gunlicks, The Länder and German federalism (2003). This is not to suggest that there is no disquiet in Germany: see, for example, Arthur Gunlicks, German Federalism Reform: Part One (2007) 8(1) German Law Journal The Provinces are not equally represented in the Canadian Senate and, more significantly, Senators are appointed by the Federal government. See Canadian Constitution, ss 22, See Patrick J Monahan, At Doctrine s Twilight: The Structure of Canadian Federalism (1984) 34 University of Toronto Law Journal See Cairns, above n See Bruce Ryder, The Demise and Rise of the Classical Paradigm (1991) 36 McGill Law Journal 309; Martha A Field, The Differing Federalism of Canada and the United States (1992) 55 Law and Contemporary Problems 108.

18 262 SYDNEY LAW REVIEW [VOL 30: 245 hypotheticals of A P Herbert s Uncommon Law, the answer is through a number of discrete steps, each of which seemed at the time to be itself certainly plausible, usually reasonable, sometimes inevitable, and never beyond the Pale, yet which cumulatively created an effect that today is indeed remarkable. 5. Where Did We Begin? The framers of the Australian Constitution deliberately created a system that was intended to give the Commonwealth adequate powers to govern the nation as a whole in those areas thought necessary at the time but which was also intended to preserve to the States a significant capacity to govern themselves in all other respects. To ensure that this would be the case, they instituted a range of constitutional mechanisms, political, financial and judicial, intended to preserve the integrity of the system as a whole. 85 The most obvious political safeguard was to ensure that the States would be equally represented in the Senate. 86 The idea, following the example of the United States and Swiss Constitutions, was that it was appropriate in a genuine federation that the people of the entire nation should be represented on a proportional basis in one house of the Federal legislature, and that the peoples of each of the constituent States should be equally represented in the second chamber. For some, there was an expectation that senators would represent the interests of their respective States. Among others it was rather hoped that the design of the Senate would help to integrate the peoples of the States into a federal commonwealth, and that it was in their view a matter of justice, rather than Realpolitik, that the Federal Parliament should be so constructed. Unlike the Swiss and United States systems, however, the Australians were committed to constructing a national government which would remain under British imperial authority. Moreover, the Australian colonies had been governed for at least fifty years under local systems of responsible parliamentary government, and there were many who wished to adopt such a system, as had been done in Canada, for the federal government. Now, Westminster systems of parliamentary government turn on the capacity of parliaments to refuse to pass the annual supply bills and it is the lower house in particular which, being popularly elected, is regarded as the house to which the government is especially accountable. As a result, those among the framers of the Australian Constitution who strongly supported the adoption of such a system generally sought to restrict the powers of the Senate, especially in relation to money bills, with a view to giving the House of Representatives a pre-eminent role in the formation of governments. At the same time, however, there was a significant number of framers who believed that genuine federalism required not only a Senate in which the States were equally represented, but also a Senate that had powers equal, or near-equal, to those of the House of Representatives, no matter what consequences this might have for the traditional Westminster idea that 85 For more detail, see Nicholas Aroney, The Constitution of a Federal Commonwealth: The Making and Meaning of the Australian Constitution (2008) (forthcoming). 86 Australian Constitution s 7.

19 2008] AN UNCOMMON COURT 263 only the lower house should have significant financial powers. The clash between these two partly-overlapping groups those in favour of parliamentary responsible government and those in favour of a powerful Senate lay at the heart of much of the debate at the Federal Conventions of the 1890s. 87 And the compromise at which they arrived was that the House of Representatives would have sole responsibility for the initiation of budgetary legislation, that the Senate would have no power to make amendments to such bills, but that the Senate would otherwise have the same powers as the House, including a power to reject or refuse to pass such bills. 88 Within these parameters the practices of parliamentary responsible government were left to develop, however they might. In the very early stages of the new federal Parliament, as MPs were adjusting to the new arrangements and the party system was still in an early stage of development, the Senate seems to have exercised a significant role in the formation of governments, but this soon gave way to a relatively rigid system of parliamentary responsible government, dominated by the House, especially as the hegemonic powers of the parties progressively took hold. 89 Governing parties were increasingly able to secure not only stable majorities in the House of Representatives, but also in the Senate. As a result, so far from protecting the political interests of the States, the Senate became a house dominated by partydiscipline, such discipline being undergirded by the realpolitik of parliamentary government on the one hand and ideological divisions on the other. If Senators in any sense continued to represent the interests of their States or the political values of their respective peoples, this was rendered invisible upon the floor of Parliament, and could only be given expression within the secretive confines of the party-room floor. And if as was in fact quite evidently the case new life was injected into the Senate following the introduction of proportional voting in 1948, 90 it has remained equally the case that the Senate stands up to the government not because it represents the diverse interests of the States but because proportional voting has often enabled minor parties to secure the balance of power. Federal governments today only rarely command majorities in the upper house. 91 The Senate has become a house where the interests of a more diverse range of voters are represented, but it has not become at least in terms of votes on the floor of the Senate a house which represents the States in any practically significant sense. The Australian Senate, as was suggested earlier, is far less effective in representing the Australian States than its United States, Swiss and especially German counterparts. And in this respect, the first safeguard of Australian federalism has largely failed to live up to the expectations of its framers. A collection of financial provisions, calculated to protect the interests of the States, has also failed to secure their intended objectives. At the time of Federation, 87 See Brian Galligan & James Warden, The Design of the Senate in Gregory Craven (ed), The Convention Debates, : Commentaries, Indices and Guide (1987) vol 6, Australian Constitution s See Geoffrey Sawer, Australian Federal politics and law (1956). 90 Harry Evans and J R Odgers, Odgers Australian Senate Practice (11th ed, 2004), ch Id, ch 1, Table 1.

20 264 SYDNEY LAW REVIEW [VOL 30: 245 the most ready and significant source of government revenue consisted of a number of different commodity taxes, most particularly excise and customs duties. In this context, elaborate arrangements were made under the Constitution for the eventual centralisation of the collection of taxes of this kind, balanced by provisions designed to return much of this revenue to the States. 92 Apart from this, however, the plan of the Constitution was that both the Commonwealth and the States would be financially independent and autonomous, in terms of their capacities to impose taxes, borrow money and determine government expenditure. 93 The Commonwealth would also have the power to make financial grants to the States, and to impose conditions on its expenditure. However, in terms of both expenditure and grants, it was expected that the Commonwealth would be limited to operating within the areas of legislative power expressly conferred upon it. As it has happened, though, the Commonwealth was able to avoid the redistribution of excise and customs duties to the States by appropriating excess funds into trust accounts, a practice which the High Court upheld. 94 And while the States still have legal power to impose income taxes, the Commonwealth has now made it politically impossible for them to do so. 95 Worse, as has been noted, the High Court has allowed the Commonwealth to spend money on any purpose or objective that it likes 96 and, likewise, has allowed the Commonwealth to make grants to the States literally on the terms and conditions that it thinks fit 97 an interpretation that has enabled the Commonwealth to exercise legally unlimited influence over the direction of State government policy in all manner of areas. The result in many of these areas has been Commonwealth policy domination 98 and fiscal imbalance, 99 under which the State governments spend vast revenues for which they are not politically accountable. Thus, while the framers intended to secure the continuing financial independence of the States, the system has been transformed (not least by High Court decisions). Yet another of the framers federal safeguards has failed to operate as many had hoped or expected. This brings us finally to the judicial safeguards of federalism. The framers of the Australian Constitution who had the United States and Swiss examples before them, and who explicitly rejected the Canadian model as one designed to create a very strong centre and relatively weak provinces (a design admittedly mocked by subsequent events) deliberately chose to construct a system which presupposed the existing powers of the States (as self-governing political 92 See, eg, Australian Constitution s See Cheryl Saunders, The Hardest Nut to Crack in Greg Craven (ed), The Convention Debates : Commentaries, Indices and Guide (1987) New South Wales v Commonwealth (1908) 7 CLR See Cheryl Saunders, The Uniform Income Tax Cases in H P Lee and George Winterton (eds), Australian Constitutional Landmarks (2003) See above n See above n See above n4, n5. 99 See Brian Dollery, A Century of Vertical Fiscal Imbalance in Australian Federalism (2002) 36 History of Economics Review 26; Warren, above n4.

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